Global Vigilance How Rx-360 Began

To tell the story of how Rx-360 began, I first need to set the context…

In the mid-2000s, the pharma industry really started to embrace globalization – after all, it allowed the industry to increase its customer base dramatically. The economics of globalization, such as the cost of goods supplied and tax implications, were certainly intriguing from a business point of view. But there were also bumps in the road in terms of the robustness and reliability of the supply chain; for example, the quality of materials being sourced from different countries. At first though, there was nothing too alarming and the general industry consensus was: “This is an immature market but we’ll develop it and make it a success. Every road has its bumps, but our industry is full of smart people so we can fix it.”

And then the heparin tragedy struck. In 2007 and 2008, some patients being treated with heparin became very sick and a number of patients died. As the situation unfolded, the US Centers for Disease Control and the FDA started to investigate, and found that the problem stemmed from raw heparin stock manufactured by Scientific Protein Laboratories in China and imported into the US by Baxter.

Heparin is a naturally occurring by-product of pork and it generally takes one slaughtered hog to produce one human dose of heparin. The world’s largest consumer of pork is China, which unsurprisingly also happens to be the largest breeder and slaughterer of hogs. Prior to the heparin tragedy, there was a viral outbreak in China that devastated the hog population, creating a shortage of pork and pork by-products. Prices started to soar, and in some cases the price for heparin increased three-fold during this period. Despite this, deliveries of heparin API remained consistent and reliable – something that should be impossible during a shortage. And yet we, as an industry, failed to recognize the warning sign.

Eventually, it was discovered that the workshops producing crude heparin intermediate were substituting it with over-sulfated chondroitin sulfate. Over-sulfated chondroitin sulfate looks like heparin, passes heparin assays of potency and purity, and even imparts a similar human therapeutic effect to heparin as it thins blood. The substitution allowed the workshops to meet their demands, win higher prices and use less expensive raw materials. They were only caught when patients started experiencing adverse reactions. The number of deaths attributed to the tragedy vary depending on the literature, but the FDA has said that at least 81 deaths and around 785 injuries were linked to heparin. If we just consider numbers, we may not be moved, but families were devastated by the incident. There is a powerful video available online showing the families of victims testifying in front of US Congress about the impact of adulterated heparin. One gentleman lost his wife but, at the time, the cause of death was unknown. Thirty days later, he lost his son, who was also taking heparin.

Learning from (big) mistakes

Even before the heparin tragedy unfolded, I was becoming increasingly concerned for the safety of our industry’s supply chains. Globalization certainly has benefits, but there are also downsides. Earlier in my career, when the companies that I worked for started to buy raw materials from countries with less developed regulatory systems and oversight, I saw far too many supply and quality problems stemming from unethical behaviors and even criminal activity – the likes of which I had never seen before. As a result, I had to establish policies and procedures at those companies to prevent the purchase of raw materials from these types of countries – and I had to defend my policy, which meant I needed data. I spent countless hours researching the issue, and found that quality and supply problems were hurting not only pharmaceuticals, but also other global industries.

Lessons Learned

What are the most important lessons I’ve learned from Rx-360? I retired in June 2016, but I believe that the last 10 years of my career have been where I have developed the most as a professional, and gained the most knowledge, education and skills. I am a scientist and quality professional, but for Rx-360 I had to gain marketing skills. I had to learn how to be a webmaster. How to use social media. And I had to learn about anti-trust laws and other legal issues. To this end, I have to credit the inside legal counsel from Amgen’s Matt Wein, who worked with me hand-in-hand in developing Rx-360’s business plan, charter and the bylaws. I also need to credit Drinker Biddle and Reath LLP – the secretariat of Rx-360 in the beginning. Mary Devin Capizzi and Jim Jamieson prevented me from making so many silly mistakes. People like that tend not to get a lot of credit but they really deserve it.

Most importantly, I’ve learned that it is possible for our entire industry – manufacturers, suppliers, policy makers, regulators, non-government organizations, and other trade and professional organizations to work together to tackle difficult situations. It is a challenge, but we can put internal politics aside to do what is best for the patient – and I hope we can continue to do so in many other areas of the industry. Another lesson I have learned is just how much the vast majority of people in this industry care about patients. The pharma industry is chastised every day because of our marketing practices or the price of prescription drugs. There are times in my life when I read a newspaper and you would think that pharma companies are worse than tobacco companies. Setting up Rx-360 and dealing with top executives at lots of different companies and organizations, made me feel really good – because it was obvious that many people really care about patients and they don’t just say this, but are putting their money and resources behind it. It was very reassuring because at times when you hear some of the terrible media headlines about pharma you can start to wonder what company management is really thinking – but I know I’m definitely working in a moral industry. 

In the aftermath of the heparin tragedy, the PDA and FDA co-sponsored a workshop on supply chain security. The FDA’s Janet Woodcock explained how pharmaceutical companies and the industry had failed to protect patients – and issued a call to action to address the problem. At the conclusion to that conference, Dr Luann Pendy (who was VP of quality at Hospira at the time) spoke emotionally about how embarrassed she was for our industry and how she was determined that a repeat of the heparin event would never happen on her watch at her company. I was also at the meeting. I was overwhelmed by the emotion in the room. People from industry cried when hearing stories from patients, while others banged their fists angrily on their table, demanding action.

The heparin adulteration was intentional and it was criminal. I realized that the GMPs we all use and rely upon every day are like the lock on the front door of my house – they are only good enough to keep the neighbors’ kids out, and will never keep criminals from entering and stealing what they want. GMPs are designed to keep honest people honest, not to stop criminal behavior. I realized that the systems my company had in place were not sufficient. But I also realized that, while working for a biotech company, there was no way that I could ever put processes and systems in place that were broad and sophisticated enough to stop international criminal organizations.

As I reflected on the workshop and the emotions, I felt the time was right for the pharma industry, its suppliers, policymakers, regulators, non-government organizations, and other trade and professional organizations to work together to address the issues of counterfeit, adulterated and substandard materials in the globalized supply chain. It goes back to the saying, “never let a crisis go to waste.” We had a platform to get people to do things that they had never done before, in a common interest to serve patients. It was around this time that I came up with one of the taglines that I use in almost every presentation that I make today: “Serving patients is a privilege, and that privilege comes with significant responsibilities; these include, but are not limited to, delivering quality medicines in a robust and reliable supply chain.”

After the workshop, I sat down with a few of my peers – heads of quality from other companies – to discuss what we had heard over drinks in a bar. And we agreed to work together. I prepared a business plan to start Rx-360 and, on Christmas Eve in 2008, I had a teleconference with the same individuals, together with others who joined in, to discuss the plan. Rx-360 was born and the founding members were Abbot (now Abbvie), Amgen, AstraZennca, GlaxoSmithKline, and Pfizer within the first 6 months, followed by Alcon, Baxter, Bristol-Myers Squibb, Cephalon, Hovione, Merck, Schering Plough, and Watson.

Rx-360 rises

Everything moved very quickly from there. We developed Bylaws, a Charter, and a website (I was the webmaster; I never thought that a 50-year man like me could become a webmaster!). The aim of Rx-360 was to help share information and to develop processes to improve the security of the supply chain – and the quality of materials within it. In June 2009, we held a launch meeting in Washington DC where we also incorporated Rx-360 as a non-profit pharmaceutical consortium. I invited around 50 people to attend and arranged for a conference room in Washington DC that would hold about 50 people. But I received more interest than I anticipated, and had to cater for 75 people, then 100 people, and then 150. We ended up with over 200 people squeezed into a room meant for 175 (they didn’t have a bigger room) – and we had to turn others away. I think it’s testament to how much emotion and passion there was around the topic.

One of the core elements of Rx-360 is a joint audit program, which allows consortium members to cosponsor audits. This isn’t new – it happens in many other industries, so after the Christmas Eve meeting I approached various organizations, including the International Air Transport Association (aviation), AIB International (food standards) and CHWMEG (environmental health and safety), to help figure out how Rx-360 should work. They were happy to share what they had learned and where they had made mistakes, so setting up the processes for the shared audits was fairly straightforward.

The bigger challenge was actually getting companies to actively participate. People were certainly interested in what we were doing and passionate about patient safety, but pharma isn’t used to collaborating in the kind of way we were asking them too – by sharing information and audits. Most pharma companies believe that everything they do is somehow proprietary and gives them a competitive advantage. It is a perception that is irrational, especially given the number of people that move between different pharma companies; people always bring best practices from their old company and compare them with the new company. Moreover, in what way is an audit method proprietary? It’s not. How you develop a molecule, the attributes of that molecule, and how it treats disease are the competitive advantages. Audits are about ensuring patient safety – and patient safety should never be a competitive advantage.

“Serving patients is a privilege, and that privilege comes with significant responsibilities.”

I spent a lot of time meeting with pharma companies and persuading them to join. (I should add that one of my personality traits is that I am the most persistent person you will ever meet; I am not afraid of rejection and if I believe in something then I will continue to go back and bug people over and over until they submit to the merits of my argument). There was one story I liked to tell in particular. When I was a kid, Volvo used to run a commercial that said that Volvo invented the seatbelt and had many patents on the seatbelt but, because seatbelts were such a life-saving device, they felt it was inappropriate for other cars not to have a seatbelt – so Volvo gave away their patents for free. In the pharma industry, how we perform audits and protect the supply chain is like a seatbelt – and the logic resonated with many people.

That said, there were valid concerns from a legal perspective. If I give my audit to Pfizer and Pfizer used it, but then something bad happened as a result of something I didn’t find, am I liable? Tricky ground. But I was reassured by the fact that CHWMEG does shared audits in the area of health and safety – they originally did audits for the oil and gas industry before broadening their reach. Ironically, many pharma companies told us their legal team was not comfortable with the idea of shared audits, even though it turned out the company was already using the CHWMEG shared audit process to do environmental, health and safety audits of their suppliers! In the end, we were able to get people talking to break down some of those barriers.

“I realized that the GMPs we all use and rely upon every day are like the lock on the front door of my house – they are only good enough to keep the neighbors’ kids out.”

Another legal concern was antitrust issues and anti-competitive issues. What would the US government say if we were working together collaboratively in this space? Would they say we are hurting one supplier in favor of another? That we are putting too much pressure on the supplier so they feel they have to lower the price? These concerns had a lot of merit so we filed a petition with the US government, presenting our business model and why it was in the best interests of patient safety. We obtained a Safe Harbor, which allows us to operate without fear of prosecution or antitrust issues from the US government.

Overcoming all of these challenges took a tremendous amount of time. I was fortunate that I was respected in the industry – and that I had the support of my company, Amgen, at the time. I remember speaking with the CEO of Amgen – Kevin Sharer – about the heparin incident and he asked me if the same thing could happen to Amgen. I told him straight: “Yes, it could.” I also showed him the Rx-360 business plan and, because he understood the implications for both Amgen and, more importantly, patients, he gave me the freedom to use company resources, including project and program managers, attorneys, communications people and my staff. I have to give a lot of credit to Kevin for all of his support.

Securing supply chains

Things have a come a long way since the Christmas Eve teleconference. Today, Rx-360 has more than 100 members, including pharma companies, regulators, non-government organizations and charitable organizations who provide medicines to third-world countries. I am so proud of its accomplishments. Rx-360 was actually the first organization to report a real example of so-called “shadow and show” factories in China, leading to several members finding such factories through supplier audits and reporting them to regulators. For those unfamiliar with this term, it involves a showcase factory that meets all the necessary regulations, but in reality the work is often pushed out to other “shadow” factories that may not have the same standards.


At any given time, there are over 500 volunteers working on various Rx-360 activities, which includes issuing “flash reports.” For example, if there is a new guidance document being issued we will review and summarize it. Our flash reports are free to anybody who wants to see them – they are a fast, effective way of disseminating information to the community. We also occasionally issue “Rx-360 Alerts” where we share a real defined risk to the pharmaceutical supply chain. For example, if we find out about a potential raw materials shortage, we send notices out quickly and develop a list of things our members should do to protect themselves, such as including special test methods to ensure a product has not been adulterated.

We also issue best practice and guidance documents (available on our website for free). In 2011, for example, we developed guidance on how to deal with the events surrounding the huge earthquake that hit Japan and the resulting nuclear accident. We developed a team of people consisting of nuclear experts, safety experts, medical doctors, quality and manufacturing people, and supply chain experts from around the globe to examine two critical areas. i) How do we know the raw materials produced and stored in Japan around the impacted zone are safe for us to continue to use? ii) How do we assure the population of Japan that the medicines we send in to treat them are safe and effective during the crisis? We worked closely with the FDA and guidance was issued within a few weeks.

The FDA has approached us a few times to ask us to examine certain incidents in times of crisis. For example, they approached us after the Chinese melamine disaster – where various protein-based products were adulterated with melamine, which has a similar nitrogen content, which is the basis of many tests. Infant formula was badly affected by the scandal in China – and many infants died as a result. After being asked to help, Rx-360 developed a test method that specifically looked for melamine adulteration. We provided it not just to our members, but to anyone who wanted to use it, for free.

We were also asked to help on the issue of cargo theft, which was at boiling point for pharmaceuticals in 2009 and 2010 (and is still a significant issue today). The FDA came to Rx-360 and we developed a white paper/guidance document on how to prevent cargo theft and warehouse theft. We also created risk assessment documents for companies to determine which of their products were at risk. A number of other organizations also made efforts to reduce pharma cargo theft and the collaborative efforts reduced cargo theft by 90 percent compared with before the guidance was issued.

But even as we continue to improve our industry’s defenses, criminals and unethical players will constantly be trying to think of workarounds. In particular, we need to beware of complacency. Our industry has had many recent supply chain successes and is now much better at screening and selecting suppliers. By sharing information, we have thwarted many criminal and unethical acts and implemented new defenses, but we must continue to be vigilant. Unfortunately, there are many companies – both large and small – who aren’t in this business for patients, but for money. And I don’t believe they have robust supply chains, because it’s an added cost. We should never stop talking about responsibility or about what should be driving us forward – patients.

Martin Van Trieste is recently retired Chief Quality Officer, Amgen, and Chair of the Board of Directors, Parenteral Drug Association.

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